Who owns the moon? We're just going to have to get up there and find out

A legal loophole has made it impossible to say who can claim the moon - but with a wealth of minerals and "rare earth" elements, plus huge potential for space exploration, we'll have to get up there and fight it out.

“I know I may not make it through this lunar night.” The China Academy of Space Technology laid the pathos on thick when it gave its lunar robot Jade Rabbit a farewell speech at the end of last month. The rover had become mired in moon dust and was unable to enter hibernation. Facing 14 days without sunlight, the solar-powered robot, launched on 2 December, was unlikely to survive. “Good night, Planet Earth,” it said. “Good night, humanity.”

It looked like the end of a venture that could have accelerated the process of finding out who – if anyone – owns the moon. The ultimate goal for Jade Rabbit was to bore a hole in the moon and see what moon rock is made of. That’s because the Chinese think the moon’s minerals might be worth extracting. “They are looking at feasibility for mining the moon, and they are likely to do it if there’s a strong business case,” says Richard Holdaway, director of the space division at the UK’s Rutherford Appleton Laboratory, which collaborates closely with China’s space programme.

There would be nothing illegal about such an operation because international laws covering the moon are “way, way behind”, as Holdaway puts it. In theory, anyone who could manage it (and afford it) could go to the moon tomorrow, dig out a huge chunk of lunar rock, bring it back to earth and sell it off to the highest bidder. The Chinese could take the moon apart and sell it bit by bit without breaking international law. The question we have to ask ourselves is simple: do we see a need to prevent that happening?

The moon’s bounty is not fanciful science fiction. “There is stuff on the moon to mine – no doubt about it,” Holdaway says. We know that minerals that are hard to find on earth, such as the “rare earth” elements and the metals titanium and uranium, are abundant up there. But the main prize is the lighter isotope of helium, known as helium-3. This gas is the critical fuel for nuclear fusion reactors, which promise an energy yield many times higher than the present generation of fission-powered reactors. Helium-3 costs roughly $10m a kilo. Though we don’t yet have commercial fusion reactors, these might not be far off. When they arrive, the demand for helium-3 will outstrip supply, and the easiest place to get more will be from moon rock. It couldn’t be easier: heat the rock and the gas comes out.

It’s not just the Chinese who have ambitions in this direction. Some private companies also have their eye on lunar rock as a source of riches. Most are based in the US, and they are actively working on lunar landers that will eventually be able to perform mineral extraction.

As yet, it is very hard to know whether the business case will stand up. It’s not a small endeavour to set up a factory on the moon. It is horrendously expensive to leave Planet Earth. Space on a shuttle is sold, like poultry, by weight. The cost of escaping the earth is roughly $25,000 per kilo. Anyone paying that kind of money upfront needs strong guarantees that the investment is worthwhile. That is why the space entrepreneur Robert Bigelow has asked the US government to nail down issues raised by who can mine the moon. “The time has come to get serious about lunar property rights,” he told a press briefing last November.

Bigelow made his money in hotels and property and has decided to pursue accommodation in space as his next venture. He already has a contract to supply astronaut habitats to Nasa; he has also said he wants to build habitats on the moon and, eventually, Mars. That plan, he argues, will be compromised unless issues of lunar ownership are clarified.

Two treaties cover the beyond-earth behaviour of nations and private companies. The oldest is the Outer Space Treaty of 1967. It says that “the exploration and use of outer space … shall be carried out for the benefit and in the interests of all countries … and shall be the province of all mankind”.

The agreement wasn’t drawn up to deal with questions of property rights, however. “It strictly prohibits claims by sovereign nations, but it does not expressly prohibit private entities from claiming private property rights,” says Michael J Listner, a New Hampshire-based lawyer specialising in space policy. “Depending on who you talk to, that omission creates a loophole for private ownership rights.”

One of the purposes of the treaty was to allow private companies to engage in activities in space, creating the opportunity for establishing commercial satellite networks, for instance. Back when the pact was developed, the Soviet Union argued that nation states were the only proper actors in space; the US wanted to give private companies a chance to exploit the new frontier. So, a compromise was reached: Article VI says that non-governmental organisations have to be supervised by their nation states.

The treaty says nothing about those non-governmental actors claiming property rights, however. “It doesn’t prohibit them, it doesn’t allow them. It’s completely silent,” says Joanne Gabrynowicz, a professor emerita of space law at the University of Mississippi who acts as an official observer to the UN effort to oversee the legal framework governing use of space.

This gaping hole in the legislation is where the 1984 Moon Agreement comes in. The United Nations Office for Outer Space Affairs hosts the agreement, which states that the moon’s environment should not be disrupted, that it should be used only for peaceful purposes, “that the moon and its natural resources are the common heritage of mankind” and that “an international regime” should be established “to govern the exploitation of the natural resources of the moon when such exploitation is about to become feasible”.

It sounds cut and dried: no one can own bits of the moon without further negotiations. The problem is that the seven nations which have ratified the Moon Agreement have no investment in it – they are not space-faring. “It’s considered pointless because the US, China and Russia didn’t even become a party to it,” Listner says. “If any of the three had done that, it might have been more meaningful.” Holdaway agrees: “It’s not legally binding. China could send armies of robots and humans and effectively stick a flag in the ground and say: ‘It’s ours.’ ”

In truth, there is no cause for alarm. The technology required for commercial exploitation is still decades away. The main question for now is whether it will ever be worth anyone’s while to develop the landers and infrastructure necessary to kick-start lunar-based industry.

Google has given some an incentive to develop our lunar capabilities. It is offering $20m to anyone who is the first to land on the moon’s surface, travel 500 metres and then send a couple of high-definition broadcasts back to earth.

Eighteen teams are aiming at this “Lunar XPrize”, which expires at the end of next year. One of the front-runners is Moon Express, a company based in Silicon Valley, California. In December, it unveiled its design for a lunar lander named MX-1. MX-1 is “the size of a large coffee table” and will get into space in the same way most satellites are deployed: aboard a conventional rocket that releases the lander once it has reached roughly 2,000 kilometres in altitude. Fuelled by hydrogen peroxide, the MX-1 will then wend its way to the moon to carry out whatever tasks are required.

Bob Richards, the founder and chief executive of Moon Express, calls the lander the “iPhone of space”, because it can perform a variety of roles on the lunar surface. Moon Express intends to accomplish its first lunar sample return mission by 2020. “We expect that material to be very valuable, with a global market,” Richards says.

Though it sounds impressive, MX-1 is so far nothing more than a design. Things get a lot harder once they need to become reality, Listner points out. “It’s fun to talk about it on a blog. It’s another thing to get down to doing it,” he says. “This isn’t like opening up the Wild West: space is hard and dangerous. You’ve got to bring your air, your water, your food – and we need to develop an understanding of how the lunar environment affects the human physiology.” It’s likely that the labour of resource extraction will involve human beings as well as robots, and we don’t know what it will be like to do a long stint on the moon. “We have some experience with the Apollo missions, but, between all those missions, humans have spent less than 100 hours performing activities on the surface,” Listner says.

Clearly there’s a long way to go – and it is entirely possible that nothing will be done about the legal issues until the first claims are staked. That’s what is so useful about China’s Jade Rabbit project: it makes it clear claims will be staked soon. Once a claim is laid, something will have to give, Gabrynowicz reckons. “When it becomes apparent that there are going to be credible attempts at resource extraction, there will have to be some diplomatic discussions,” she says.

According to Richard Bilder, a space law specialist at the University of Wisconsin-Madison, the high probability of those discussions hitting an impasse makes it worth pushing nations to start the process of setting up a legal regime right away. “This is likely to be easier to accomplish now, while prospects for lunar extraction are still only speculative, than after one or several countries succeed in establishing a lunar base and have clear special stakes and interests,” he says.

Yet Bilder remains pessimistic about the likelihood of this happening. The United States, he notes, seems uninterested, and there is little incentive for China and India to attempt to resolve the legal problems now – they will just want to get on with establishing lunar bases and launching whatever activities they deem worth pursuing.

Others are more upbeat. Some concerns about Chinese ambition derive from a cold war perspective that is no longer relevant, Gabrynowicz argues. The truth is, nations are now far more likely to become partners in seeking to exploit lunar resources. Holdaway points out that the UK and China are already working together in space, and says there is little reason to think both countries won’t be open to partnerships concerning the moon.

And even if it’s not nations but private companies, there could still be international collaboration, Listner reckons. “Some companies might form conglomerates to combine their resources to do it,” he says. We shouldn’t necessarily be concerned about that: private enterprises are still accountable to national governments and so will be subject to regulation – especially as governments are likely to be among their main customers, Gabrynowicz notes.

Last month, Nasa raised the game by launching a competitor to the Lunar XPrize. Under the Catalyst scheme, Nasa will share its experience and resources with private firms; in return it will get access to the companies’ designs for lunar landers. There’s a twist: US security regulations will make it much easier for US firms to co-operate with Nasa than businesses based abroad. So if Catalyst works as a stimulus to moon mining, the spoils will most likely belong to America.

Whether it’s helium-3 fuel, mineral resources or plain water – what Richards calls “the oil of the solar system”, because it is vital for life support and rocket fuel – lunar resources will almost certainly be used first to support further space exploration. It makes much more sense to launch a manned mission to Mars from the moon than from earth: that way overcomes the difficulties of escaping our planet’s gravity. Operators of fusion-powered Mars probes, crewed by astronauts from a lunar base, are the most likely customers of the first lunar industries. It remains to be seen whether we will be happy with any of that, Holdaway says. “Will this be acceptable to the rest of world? I don’t think anyone really knows the answer to that.”

Pale, male but far from stale: what can the economists of history teach us?

Is economics a science? It’s an old question – and in my view, not a terribly useful one. Yet there is a reason why it never stops being asked. Physicists have discovered the universal laws governing energy and motion, and as a result can tell us with scarcely credible precision how to land a man on the moon. Economists, by contrast, can’t even agree on why the last financial crisis happened, let alone what we should do to prevent the next one – and that’s despite the fact that we wrote the rules of finance ourselves. Real sciences make progress. Economics, on the other hand, seems to go round and round in circles.

Needless to say, this embarrassing situation irritates economists more than anyone else. As a result, over the past several decades mainstream economics has attempted to assimilate itself ever more closely to the culture and methods of
the natural sciences. These days, self-respecting economists express their theories as mathematical models, rather than in words. Advanced statistical techniques are deployed to test hypotheses and so resolve the answers to empirical questions. If possible, experiments are designed and conducted. A few avant-garde researchers have even gone so far as to rebrand their research groups as “labs”. Whether these developments represent a long-overdue reform of the methodology of economics, or just the symptoms of a chronic inferiority complex, they have certainly dealt a mortal blow to one formerly central area of the economics curriculum: the history of economic thought. If economics is a science, there is as little point in reading the economists of prior ages as there is in engaging with Aristotle on biology or mugging up on the theory of phlogiston.

The publication of Linda Yueh’s The Great Economists: How Their Ideas Can Help Us Today is therefore a fascinating event for anyone interested in economics. For this is a book which, as its title suggests, champions the value of studying the leading economic thinkers of the past.

It sounds like swimming against the tide of history. Is it really possible to reclaim a role for the scientifically backward theorising of a canon of Dead White Men (and, to Yueh’s credit, one Dead White Woman)? Well, there can hardly be anyone better qualified to try. As an Oxford don and a professor at London Business School, Yueh undoubtedly knows her stuff; and as a former chief business correspondent for the BBC and economics editor at Bloomberg TV, she is a well-known and skilful communicator.

The challenge Professor Yueh has set herself is even bigger than it first appears, however. For looming like Muhammad Ali in his pomp over any modern attempt at an overview of history’s great economists is a classic so enduringly popular as to make most challengers throw in the towel before the starting bell: Robert Heilbroner’s The Worldly Philosophers: The Lives, Times and Ideas of the Great Economic Thinkers.

I first read this multimillion best-seller, published in 1953, 25 years ago. There can hardly be an economist in the English-speaking world who wasn’t assigned it as the first text on their undergraduate reading list – and for not a few of them, I suspect, it is about the only thing they can remember from their course. And with good reason: for Heilbroner – a student of Joseph Schumpeter at Harvard who later became a professor at the New School for Social Research in New York – was a talented writer in command of his subject matter and with a gift for leavening abstract ideas with earthy biography. Yet the real reason that The Worldly Philosophers has reigned for so long as the heavyweight champion of the genre is that it is organised around a clear and compelling vision of what, historically speaking, economics actually is.

The book’s underlying argument is that economics is nothing more nor less than the project of trying to understand, evaluate, and then control capitalism – the historically unprecedented system of organising society though the operation of markets and money that began to evolve in Europe in the late Middle Ages.

Before the capitalist revolution, there was no need for a discipline devoted to explaining why production, distribution and exchange are structured as they are, because, as Heilbroner says: “[who] would look for abstract laws of supply and demand, or cost, or value, when the explanation lay like an open book in the laws of the manor and the church and the city, along with the customs of a lifetime? Adam Smith might have been a great moral philosopher in that earlier age, but he could never have been a great economist; there would have been nothing for him to do.”

Once capitalism began its relentless rise, however, people felt an imperative to clarify its unwritten rules, to pass judgement on whether they were good or bad, and to strive to rewrite its constitution accordingly. The project that answered that call was economics – an enterprise as value-laden and politically fraught as constitution writing always is. In Heilbroner’s scheme, in other words, economics is unashamedly not a science – and, in striking contrast to the natural sciences, there is no real distinction between the history of economic thought and the history of the economy itself. The former is a reaction to the latter; and as economic thought began to pervade the modern mindset, the latter was just as often a reaction to the former.

Hence the plan of The Worldly Philosophers: a parallel history of the capitalist revolution and of the theories that have been developed to make sense of it. In Heilbroner’s scheme, in order to understand the rules we live by today, we need to understand who invented them, and why. The history of economic thought is therefore one of the keystones of economics – and economics itself is, to an important extent, intellectual history.

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On the face of it, Yueh’s book follows the format of The Worldly Philosophers. It too devotes a series of separate chapters to a pantheon of historical economic thinkers (and six of them – Adam Smith, David Ricardo, Karl Marx, Alfred Marshall, John Maynard Keynes and Joseph Schumpeter – are covered by both books). It, too, aims to extract contemporary guidance from study of their theories. The resemblance is only superficial, however, because the conception of economics that underpins Heilbroner’s work is not one that would be recognised by most economists today.

Heilbroner himself, in an epilogue to the 1999 edition of The Worldly Philosophers entitled “The End of the Worldly Philosophy?”, explained that economics had even then almost completed its transition to a new sense of its essence and purpose. “The new vision,” he wrote, “is Science; the disappearing one, Capitalism.”

The Great Economists reflects this dramatic change in how economics conceives its methods and its aims. For Yueh, as for most contemporary practitioners, economics is not about reconstructing the historical mind-map of capitalism, but
about the discovery of objective economic laws through the scientific study of the social world.

Her rationale for exploring the history of economic thought is accordingly quite different from Heilbroner’s. It is not so much to understand the era in which the great economists lived, still less to grasp any role their theories may have played in shaping the conventions that govern the modern economy. It is rather because each of her subjects was the first to explain some fundamental economic principle or discover some economic law applicable to our contemporary dilemmas. It is in this direct sense that their ideas can help us today.

One chapter, for example, recruits the 19th century English economist David Ricardo to help answer the timely question “Do trade deficits matter?” Ricardo was the first to formalise the principle of comparative advantage – the idea that all nations gain if each one specialises in producing the things at which it is relatively more efficient and then freely trades its output. The truth of this principle, Yueh explains, is more important than ever as the US seems headed for protectionism.

Another chapter summarises the life and work of Irving Fisher, the greatest American economist of the first half of the 20th century, in order to answer the question “Are we at risk of repeating the 1930s?” Fisher’s most celebrated contribution was his book The Debt-Deflation Theory of Great Depressions, which explained how a recession-induced drop in prices can raise the real burden of debt, leading to further deflation and so yet heavier debt, in a vicious circle. That led him to advocate reflationary monetary policy as the correct response to debt crises – a conclusion which, as the past decade has shown, modern central bankers have taken warmly to heart.

Yueh acknowledges that the validity of such principles is not unchallenged today and she is scrupulous in stressing ongoing debates. Nevertheless, the general idea is that they represented major advances in our knowledge of how the economy works, and that these economists are, to paraphrase Newton, giants on whose shoulders modern economists stand.

Hence the plan of The Great Economists reflects a distinct conception of the purpose of studying the history of economic thought, and indeed of economics itself. In this view, the history of economic thought is primarily a pedagogical device – a harmless cosmetic aid, as useful for adding some much-needed colour as, and no less scientific than, teaching physics by referring to Boyle’s Law, or biology by studying Charles Darwin’s theory of natural selection. Economics itself, however, is definitely a science.

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As I said, I don’t think the question of whether economics is a science is a very useful one. The inconvenient truth is that in some respects it is, and in others it isn’t. As a result, the different approaches to the history of economic thought taken by Yueh and Heilbroner both have their merits.

Nevertheless, if I was forced to recommend only one of them to a budding student of economics, I would have to plump for Heilbroner’s classic. In my view, the challenges facing Western economies in the post-2008 era are existential, as well as normal – and over all of them hovers the master question that haunts the writings of every one of Heilbroner’s worldly philosophers, from Smith to Schumpeter: whether or not capitalism is ultimately sustainable as a way of organising society.

The achievements of modern, scientific economics are significant, and the reader who wants a slick and well-curated tour of its current policy recommendations will profit greatly from Yueh’s enjoyable and up-to-date book. But if you want to know whether capitalism can survive its current crisis, and what might replace it if it doesn’t, then Heilbroner’s study of those great thinkers, who explored these questions free from our contemporary prejudices and vested interests, remains the place to start.

Felix Martin is the author of “Money: the Unauthorised Biography” (Vintage)

The Great Economists: How Their Ideas Can Help Us Today
Linda YuehViking, 368pp, £20

Felix Martin is a macroeconomist, bond trader and the author of Money: the Unauthorised Biography